Dear Atty. Gab,

Musta Atty! I’m writing to you because something doesn’t feel right at our LGU office here in Santa Maria, Bulacan, and I’m hoping you can shed some light on it. My name is Ana Ibarra, and I work as an administrative assistant.

Our department head, Mr. Roberto Valdez, has been on an approved extended leave for about two months now. Before he left, the Mayor designated Ms. Estrella Soriano, our division chief, as Officer-in-Charge (OIC) of our department. While Mr. Valdez is still officially on leave and receiving his salary, Ms. Soriano recently processed papers appointing Mr. Valdez as a ‘Consultant’ for a special health project funded by a grant from the Department of Health, which our LGU manages. The consultancy fee is quite substantial, around P50,000 per month, on top of his regular salary.

What worries me is that the appointment paper Ms. Soriano signed was dated back to the start date of the project, which was shortly after Mr. Valdez went on leave. Also, Ms. Soriano and Mr. Valdez are known to be very close personally. Honestly, the tasks for the ‘consultancy’ seem very similar to Mr. Valdez’s regular duties if he weren’t on leave. I handled the disbursement voucher, and seeing him get paid twice using funds meant for the health project feels wrong, even if it’s a DOH grant.

Was Ms. Soriano, as an OIC, allowed to appoint her own boss, especially when he’s on leave? Is it okay for Mr. Valdez to receive consultancy fees from a project managed by our office while also getting his LGU salary? Does it matter that the funds came from a national agency grant and not directly from LGU taxes? I am confused and concerned about potential irregularities. Any guidance you could offer would be greatly appreciated.

Salamat po,
Ana Ibarra

Dear Ana Ibarra,

Thank you for reaching out with your concerns. It’s understandable why the situation you described involving Mr. Valdez and Ms. Soriano would raise questions about propriety and legality within your LGU department. Navigating the rules surrounding appointments, compensation, and the specific powers of an Officer-in-Charge (OIC) can indeed be complex, especially when public funds and potential conflicts of interest are involved.

The core issues here involve the limits of an OIC’s authority, the prohibitions against holding multiple positions or receiving double compensation in government service, and the ethical standards expected of public officials, particularly concerning potential conflicts of interest and the proper use of public funds, regardless of their source. Let’s delve into the legal principles that govern these situations.

Untangling Authority and Ethics in Government Contracts

The situation you’ve described touches upon several important legal and ethical principles governing public officers in the Philippines. Primarily, we need to examine the authority of an Officer-in-Charge (OIC), the rules surrounding appointments and compensation, and the standards set by anti-graft laws and codes of conduct for public officials.

Firstly, the authority of an OIC is generally circumscribed. While specific agency rules might grant broader powers, the general understanding, often reflected in government auditing and civil service guidelines, is that an OIC’s role is primarily administrative and focused on ensuring the continuity of operations during the temporary absence of the regular office holder. Key decisions involving significant discretion, such as appointing personnel, are often considered beyond the typical scope of an OIC’s authority unless expressly permitted.

“In the latter case [OIC], the OIC enjoys limited powers which, are confined to functions of administration and ensuring that the office continues its usual activities. The OIC may not be deemed to possess the power to appoint employees as the same involves the exercise of discretion which is beyond the power of an OIC (CSC Res. 1692, Oct. 20, 1978).”

This principle suggests that Ms. Soriano’s appointment of Mr. Valdez, especially to a consultancy role requiring a contract, might be questionable if her designation as OIC did not explicitly grant her such appointment powers. Appointing her own superior, who is merely on leave, adds another layer of complexity and potential impropriety.

Secondly, the issue of Mr. Valdez receiving both his regular salary and consultancy fees raises concerns about the prohibitions against multiple positions and double compensation. The Constitution and Civil Service rules generally forbid appointive officials from holding other offices or employment in the government, including consultancies, unless specifically allowed by law or the primary functions of their position. Similarly, receiving additional or double compensation is prohibited unless explicitly authorized by law.

Even if the consultancy is technically permissible, engaging in such requires proper authorization. Republic Act No. 6713, or the Code of Conduct and Ethical Standards for Public Officials and Employees, prohibits engaging in the private practice of one’s profession (which includes consultancy) unless authorized, and provided it doesn’t conflict with official duties.

“SEC. 7. Prohibited Acts and Transactions. – … (b) Outside employment and other activities related thereto. – Public officials and employees during their incumbency shall not: … (2) Engage in the private practice of their profession unless authorized by the Constitution or law, provided that such practice will not conflict or tend to conflict with their official functions…”

Crucially, this authorization must typically come from the head of the agency or the official’s direct superior. In this case, having the OIC (Ms. Soriano), who is subordinate to Mr. Valdez, grant the authorization and contract appears irregular. The proper authorizing official would likely be someone higher in the LGU hierarchy, possibly the Mayor, not the person temporarily filling in for the beneficiary of the contract.

Thirdly, the backdating of the appointment raises red flags regarding retroactivity. Civil Service rules generally mandate that appointments take effect on the date of assumption but not earlier than the date the appointment was actually issued (signed by the appointing authority). Making an appointment retroactive is typically disallowed, suggesting an attempt to legitimize payments for a period before the appointment was formally made.

Finally, these actions could potentially fall under the purview of Republic Act No. 3019, the Anti-Graft and Corrupt Practices Act. Specifically, Section 3(e) prohibits public officers from causing undue injury to any party, including the government, or giving unwarranted benefits, advantage, or preference through manifest partiality, evident bad faith, or gross inexcusable negligence.

“Bad faith does not simply connote bad judgment or negligence; it imputes a dishonest purpose or some moral obliquity and conscious doing of a wrong; a breach of sworn duty through some motive or intent or ill will; it partakes of the nature of fraud… Evident bad faith connotes a manifest deliberate intent on the part of the accused to do wrong or cause damage.”

If Ms. Soriano knowingly exceeded her authority as OIC, or if both she and Mr. Valdez conspired to arrange this consultancy despite knowing its impropriety (evidenced perhaps by the backdating and potential conflict of interest), their actions might be construed as being in evident bad faith. Giving Mr. Valdez substantial consultancy fees for work possibly overlapping with his regular duties, facilitated through a questionable appointment process by his subordinate, could be seen as giving him unwarranted benefits. The improper disbursement of project funds, even if from a grant, constitutes undue injury to the government because these funds are public in nature once received and managed by the LGU and are intended for specific project objectives, not questionable consultancy fees.

“[Funds from grants held by government agencies] are in the nature of ‘trust fund’ … A trust fund may be utilized only for the ‘specific purpose for which the trust was created or the funds received.’”

The source of the funds (a DOH grant) does not change their public character once entrusted to the LGU for management. These funds must still be disbursed according to government accounting and auditing rules and regulations, and their misuse can lead to liability.

Practical Advice for Your Situation

• Document Everything: Keep copies of any documents you handle or observe related to this matter, such as the appointment paper, contract (if any), disbursement vouchers, and project documents. Note dates, amounts, and individuals involved.
• Understand OIC Authority Limits: Try to discreetly ascertain the specific terms of Ms. Soriano’s designation as OIC. Was she given specific appointment powers by the Mayor? Knowing the defined limits of her authority is crucial.
• Consult Internal Rules: Check if your LGU or the Civil Service Commission has specific guidelines on OIC appointments, consultancies, outside employment, and double compensation applicable to local government units.
• Confidential Reporting Channels: Determine if your LGU has a confidential internal mechanism for reporting potential irregularities or ethical concerns, perhaps through the Human Resource department, legal office, or an integrity committee.
• Consider the Commission on Audit (COA): Since COA audits government funds, including grants managed by LGUs, the questionable disbursements might eventually be flagged during an audit. COA often looks into OIC actions, double compensation, and unauthorized contracts.
• Office of the Ombudsman: For serious concerns about potential graft or corruption involving public officials, the Office of the Ombudsman is the primary investigating body. Filing a complaint there is a significant step that requires careful consideration and evidence.
• Seek Confidential Advice Internally (If Safe): If there is a trusted superior or official in the LGU known for their integrity (perhaps in the Mayor’s Office or the Legal Department), you might consider seeking their confidential advice, but assess the risks carefully.
• Protect Yourself: Be cautious about how you proceed. Raising concerns, especially about superiors, can sometimes lead to retaliation. Ensure your actions are documented and, if possible, pursue official and confidential channels.

The situation you described certainly warrants scrutiny based on established legal principles regarding the authority of OICs, prohibitions on double compensation and unauthorized outside employment, and the standards of conduct expected under anti-graft laws. The combination of an OIC appointing her absent superior, the potential conflict of interest, the issue of double compensation using grant funds, and the retroactive effectivity of the appointment collectively suggest possible irregularities.

Hope this helps!

Sincerely,
Atty. Gabriel Ablola

For more specific legal assistance related to your situation, please contact me through gaboogle.com or via email at connect@gaboogle.com.

Disclaimer: This correspondence is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please schedule a formal consultation.